The principal objective of this proposal is to characterize biologic variables affecting treatment response and resistance in a Phase III Intergroup trial, E2905, testing the benefit of combined treatment with lenalidomide (LEN) and darbepoetin alpha (DA) in patients with myelodysplastic syndrome (MDS). Ineffective erythropoiesis remains the principle therapeutic challenge in MDS with only a minority of patients experiencing sustained benefit from recombinant erythropoietin (EPO). Investigations by the Principal Investigator have shown that LEN has erythropoietic activity in lower risk MDS patients who have failed EPO treatment. Our laboratory investigations indicate that LEN promotes erythropoiesis in MDS by two distinct mechanisms; (1) selective suppression of chromosome 5q deletion (del5q) clones, and (2) potentiation of the EPO receptor (R)/STAT5 signal. The capacity of LEN to augment the EPO-R signal and promote erythropoiesis will be tested in E2905 in which patients with low probability of EPO response will receive LEN with or without DA treatment. Response rate and duration may be influenced by several biological variables including low endogenous EPO production (LEN only), ineffective EPO-R signal enhancement, karyotypically unresolved 5q deletions, and modulation of relevant LEN cell targets. We hypothesize that LEN restores effective erythropoiesis through inhibition of phosphatase targets that are karyotype-specific: (a) inhibition of the CD45 phosphatase in non- del5q MDS to potentiate the EPO-R/STAT5 signal, and (b) inhibition of the haplo-deficient Cdc25c and PP2A phosphatases in del5q clones leading to selective clonal suppression. To characterize biological variables affecting treatment response and resistance in E2905, and the regulation of the EPO-R signal in MDS, we propose the following Specific Aims: 1. To evaluate the effect of CD45 isoform profile on LEN potentiation of EPO-induced STAT5 phosphorylation in CD71+ erythroid precursors and the relationship to erythroid response. 2. To characterize molecular targets relevant to lenalidomide cytotoxicity in del5q cells. 3. To evaluate the frequency of cryptic chromosome 5q31 deletions in patients with non-del5q MDS by array- based genomic scan, and to determine the relationship to hematologic response. With the aging of the American population, MDS is rapidly increasing in prevalence with proportional demand on medical resources. The proposed investigations should provide important insight into mechanism of disease biology and the development of novel more effective therapeutics.